Bile acid synthesis plays a crucial role in maintaining cholesterol homeostasis since it is responsible for the catabolism of more than 50% of the cholesterol excreted from the body. High plasma cholesterol often results in atherosclerosis, which is a form of chronic inflammation. In response to inflammation, the rate of synthesis of alpha1-antitrypsin (alpha1 -AT) increases. Alpha1-antitrypsin is a serum protease inhibitor that is synthesized in the liver and its rate of synthesis increases in response to inflammation. This increase in alpha1-AT synthesis gives rise to an increase in peptides, like its carboxy-terminal C-36 peptide, resulting from alpha1-AT cleavage by proteases. Because of this correlation between plasma cholesterol levels, inflammation and alpha1-AT rate of synthesis, we investigated the effect of the C-36 serpin peptide on hepatic bile acid biosynthesis and showed that C-36 is a powerful and specific transcriptional down-regulator of bile acid synthesis through inhibition of the cholesterol 7alpha-hydroxylase/CYP7A1 (7alpha-hydroxylase) and sterol12alpha-hydroxylase/CYP8B1 (12alpha-hydroxylase) promoters. This inhibition appears to be mediated by specifically interacting with alpha1-fetoprotein transcriptional factor (FTF), a positive transcriptional factor key in bile acid biosynthesis. We hypothesize that the C-36 peptide specifically interacts with FTF, and this interaction suppresses 7alpha- and 12alpha-hydroxylase promoter activities. Experiments are proposed to validate this hypothesis and to study the molecular mechanisms involved in the interaction between these two molecules, the FTF protein and the alpha1-AT-derived C-36 peptide. The specific aims of this proposal are: 1. Determine the effect of the a1-AT derived C-36 peptide on bile acid biosynthesis in animals. 2. Determine the subcellular targeting of the alpha1-AT derived C-36 peptide in both culture cells and animals. 3. Characterization of the mechanism of action involved in the regulation of 7alpha- and 12alpha-hydroxylase gene transcription by the alpha1-AT derived C-36 peptide. 4. Characterization of the alpha1-AT promoter and its self-regulation by the C-36 peptide. The successful completion of this project may provide an important link between cholesterol homeostasis and inflammation.